GM CEO Henderson: Getting a raise despite the pay czar's cuts

Americans can be excused for thinking that executives at the seven companies receiving TARP bailout funds would see a pay cut this year, following yesterday's news that the U.S. Treasury's pay czar would slash executive compensation by as much as 90 percent starting next month.

But at least one chief executive among the troubled automotive and banking companies is getting a raise -- Fritz Henderson, who replaced Rick Wagoner as General Motors CEO in March. Henderson (pictured) will see his total annual compensation rise to nearly $5.5 million under guidelines imposed on top executives at companies that received funds under the federal government's bailout plans, Bloomberg News reported, citing a person familiar with the matter.

Henderson's cash salary, which currently rings in at $1.26 million, has been trimmed 25 percent to $950,000, said the person, who Bloomberg said declined to be identified due to the private nature of the matter. But Henderson will receive $4.24 million in stock and restricted stock, according to a letter from Kenneth Feinberg, the special master for executive compensation for the Troubled Asset Relief Program.

"Most people wouldn't consider it a raise. They brought the salary down some and increased the reliance on long-term stock," GM spokeswoman Julie Gibson told the news agency.

Feinberg said Thursday in a press conference unveiling the new pay rules that his primary responsibility was to ensure that taxpayers got as much of their money back as possible. "Taxpayers are in deep with these seven firms," Feinberg told reporters.

In addition to GM, companies receiving TARP funds include GM's financial unit, GMAC; Chrysler, and its finance arm Chrysler Financial; Bank of America (BAC); Citigroup Inc. (C); and American International Group Inc. (AIG).

Under the pay plan, cash salaries will be limited to $500,000 for more than 90 percent of affected employees. Personal expenses for such perks as company autos and corporate jets will be capped at $25,000 unless Feinberg's office approves higher payments.

The new rules call for top executives to be provided a base salary combined with "stock salary." Employees are required to hold the stock for two years and can sell only one-third of their holdings each year for three years.

A third category, known as "long-term restricted stock," is tied to the company's repayment of bailout money. The goal here, Feinberg said, was to promote strategies for long-term growth rather than short-term gains. That's meant to counter critics who argue that exorbitant cash salaries granted to executives foster shortsightedness.